Ronan McLoughlin and Lisa Broderick report on DACB Dublin’s recent growth, with a busy last year and new hires, as well as the opportunities and issues expected for Irish law firms in the future
You must be logged in to view full premium content.
DAC Beachcroft has announced today (14 August) its tenth consecutive year of revenue growth, with a total turnover of £326.5m, reflecting a 9% increase from last year’s £300m.
Profit before tax saw a 15% increase, reaching £71m, while profit per member rose to more than £700k, up 7% from last year’s £652k.
Speaking with Legal Business, DAC Beachcroft’s managing partner David Pollitt (pictured) said: ‘This past year, the level and sharpness of the growth have been greater than we’ve seen in recent years. This is a consequence of our strategy being in place and well-established, and we are now seeing the real fruits of all that hard work paying off.’
‘We are never complacent but there is a real sense of momentum. If I look at the first quarter of this financial year, we’re growing at an even greater rate than we did over the course of last year. We’ve carried that growth into this financial year as well, so we’re feeling good,’ he continued.
Pollitt emphasised that this year saw strong results in core practice areas, including insurance, health, real estate, technology, and financial services.
He explained: ‘Often, in firms, you have some areas performing stronger than others, which averages out, but this year, everyone did well. That’s contributed to a greater level of revenue growth than we’ve seen in recent years. I attribute this to being very clear about what we want to do, where we want to do it, and who we want to do it for, rather than trying to be everything to everyone. We know what we’re good at, and we concentrate on that and try to improve in those areas.’
In the UK, the firm saw an 8% increase in revenue to £294.3m, from last year’s £271.8m. The litigation practice and the employment group were pointed to as having performed well, while real estate also saw continued demand despite challenging external markets.
The firm also made several lateral hires, including real estate partner Steven Pitchford from Macfarlanes, and expanded its national casualty practice by adding seven partners across Manchester and Leeds: Nicola Skeldon and Louise Shaw, Anthony Baker, Gavin McClenaghan, Ciaran Garnett, Carl McGuire, and Stephen Johnson, all joining from Plexus Law. It also promoted 11 of its lawyers to partnership at the start of the year.
Pollitt explained that the firm has been focused on international expansion, particularly for its shipping, trade and commodities practice. The firm opened a new office in Peru this year following on from its new offices in Milan, Rome, and Buenos Aires last year.
He said: ‘We have a particular strength in Latin America and Europe, so we focused our growth efforts in these regions over the past 12 to 18 months. Our approach involved talking to clients about where they see growth and specific needs and determining how we can support them in those areas.’
‘This was the basis for each of the three latest offices we opened. Knowing the local partners well and having collaborated with them over several years helped mitigate risks. We’re confident that these openings will bring in trusted partners and generate strong client demand,’ Pollitt continued.
Looking ahead, Pollitt outlined the firm’s targets for FY25, emphasising consistency and opportunity: ‘The plan is more of the same. We have a forward strategy of growth, but even with the best strategy, we may not always foresee the opportunities that arise.’
‘Our goal is to ensure that when these opportunities do present themselves, we’re in the best possible position to capitalise on them. Whether it’s the quality of our lawyers, our clients, or the success of our international offices, these are all areas where we saw opportunities this year that made our firm stronger and better. I want to see more of that moving forward.’
Pollitt concluded: ‘These results show that we are getting even stronger. I want to continue that year after year.’
Lisa Broderick of DAC Beachcroft examines the key problems and priorities for Irish clients, as well as the firm’s recent international growth and adaptations post-Covid
DACB Dublin is part of DAC Beachcroft LLP, an international law firm with over 2,800 professionals and a legal network advising across the United Kingdom, Europe, Asia-Pacific, Latin America and North America.
You must be logged in to view full premium content.
Dentons has become the latest firm to post encouraging financials for 2021/22, announcing a robust 14% increase to its top line across its UK, Ireland and the Middle East (UKIME) business, which reached £260.4m.
Much of the growth was driven by a surge in corporate activity, with the UK corporate group seeing revenues hike by over 20%. Internal referral work also increased, as inbound work from outside the region surged by 40% to £35m.
While the firm does not disclose profit figures, profit per equity partner (PEP) is estimated to be near the £1m mark occupied by firms such as Simmons & Simmons.
Speaking to Legal Business, UKIME chief executive Paul Jarvis (pictured) said: ‘We saw a big increase in cross-border M&A and private equity across a number of key sectors. What we have seen this year is one of our USPs, the global presence, really coming to the fore.
‘In a very hot transactional market, where there’s a lot of cross-border M&A, clearly that plays into our sweet spot because we could service that M&A not just in the UK, Ireland, Middle East, but across the globe. That has given us a really big launchpad and you can see the upswing in work referred from international offices outside of the UK. Our referrals back have also really increased.’
The Dublin office also saw impressive development. In its first full year of trading, the outpost was able to contribute 18% to revenue growth across the collective regions.
Commenting on the firm’s plan for the office, Jarvis added: ‘It was never a Brexit play for us. We were looking at Ireland way before Brexit. What we have and continue to build in Ireland is a premium law firm. We have recruited the top talent from the top firms, and we are seeing that top talent deliver immediately.’
Assessing the current year, Jarvis concluded: ‘Last year was exceptionally busy. If you look at the activity levels that we’re at currently, they’re not quite what they were last year, but if you compare them to previous years we’ll be doing very well. When you’re comparing to a real high, you can say “oh look, we’re X percent below last year”, but last year was completely turbocharged.’
Meanwhile, in sharp contrast to last year’s booming results, DAC Beachcroft (DACB) today unveiled an investment-impacted set of financials blighted by a 7% dip in profit per member.
Likewise, profit before tax tumbled 8% from £67m to £62m, as the firm reported a year of heavy outlay on people and infrastructure. Total turnover was up a sedate 2%, from £275m to £280m.
The results mark a significant reverse from last year, when DACB unveiled pacey results headlined by a 19% uptick in both profit before tax and profit per member.
Managing partner David Pollitt told Legal Business: ‘The decrease in PEP is just down to the fact we had such a good year last year, and we decided to use some of that surplus to invest in the business.’
In terms of spending, DACB shelled out on a new practice management system, as well as cloud technology and cyber security to ‘futureproof the firm’, according to Pollitt. The firm also made 11 lateral hires over the course of the year and made 17 partner promotions in May 2022, going some way to explain the drop in profit per member.
Pollitt pointed to good performances in the firm’s insurance and healthcare businesses, and while real estate performed similarly, he admitted: ‘I’m not sure what the future holds there.’ Likewise, Pollitt identified a drying up of corporate work that had kept the market lively during the previous financial year: ‘Like many firms, it’s keeping the momentum rather than trying to forge ahead. Had the transactions carried on like they were, our numbers would probably look quite different.’
In terms of priorities for next year, Pollitt said: ‘Our international strategy is a key priority for us. One of the more frustrating aspects of the Covid year was that it made international growth more difficult. Finding the right partner takes time. We’ve got three or four projects on the go, two of which are very close.’
On the international front, during the year DACB signed a co-operation agreement with network partner BLD Bach Langheid Dallmayr in Germany. The combination gives both firms ‘more lawyers in Europe than any other insurance-focused law firm’, according to DACB.
Despite today’s unflattering numbers, Pollitt is confident that the concerted investment will translate into immediate growth, telling Legal Business that the firm is already up 6% for the first quarter as compared to last year.
At last – the one you’ve been waiting for – we are delighted to reveal the Law Firm of the Year for the 2020 Legal Business Awards.
Only the most outstanding law firms over 2019 made the shortlist in this, our most prestigious award. Judges were looking for a firm that took the market by storm and achieved more than their direct competitors and peers. Achievements may include – but are not limited to – the successful development of new practice areas, expansion into new international or domestic markets, new client wins, the completion of a strategic merger or acquisition, improved financial performance, or a successful recruitment policy. The winner of this award is quite simply the best in the business right now.
Eversheds Sutherland emerged as a clear winner. Not only was the firm successful commercially, turning in strong financials and pointing to a number of major new client wins and panel reappointments for global giants, but it has also made a difficult transatlantic merger work under strong leadership; completed a strategic masterstroke with the spin-off of its alternative legal services arm; bolstered its ranks with some prominent lateral hires; and nailed its colours to the mast with firm targets for ethnic diversity.
Eversheds was the only firm in the top ten of the LB100 to record double-digit revenue growth for 2018/19, building on its 2017 transatlantic merger with a 14% revenue uptick to £890.2m while PEP rose 8% to £886,000. The US project has been a clear success and accordingly, the firm announced new office launches in Chicago and San Diego during 2019.
However, the decision to spin-off its alternative legal services business into a separate corporate structure, called Konexo, and open that up to outside investment to rapidly scale up was bold and innovative. When Eversheds’ New Law offerings were established in 2011, an initial revenue target of £10m was set. Now at £40m, Konexo is aiming to generate £100m within the next five years and was the only firm to set out its stall so clearly.
With financial success and strategic acumen in ready supply, Eversheds’ stock has simply grown, both in terms of GCs regularly citing the firm as a go-to adviser to Legal Business but also in terms of attracting noted talent from other firms. This was obvious in 2019 with a virtually unheard of lateral hire from Slaughter and May in Hong Kong – disputes partner Mark Hughes, while the firm boosted its credentials in the upper-mid-market corporate space considerably with the hire of Giles Dennison, the former UK head of corporate at Simmons & Simmons.
The firm also took the opportunity in 2019 to hold its hand up and point to its shortcomings in terms of promoting ethnic diversity. The firm was clear on its desire to do better and has committed to clear and measurable targets. By 2025 the firm wants 10% of its UK partnership to be comprised of BAME lawyers, with the figure currently standing at just over 5%. Throughout its UK workforce, including partners, the firm wants to hit 14% BAME representation by 2022, with the figure currently sitting at just below 12%.
Our congratulations go to Eversheds Sutherland, which thoroughly deserves its title of Law Firm of the Year.
DAC has well and truly turned things around after a period of drift, clearing nearly £40m of debt in the last four years. Revenue at the firm grew 6% to £243m in the year to 30 April 2019, building on an 11% uptick the previous year, and coupled with a 10% increase in profit to £52m. Profit per equity partner similarly increased 8% to £570,000.
It has been an expansive period for the firm. In 2019, it lured across a five-partner City insurance team from Norton Rose Fulbright while also launching in Paris and Belfast. Meanwhile, in January of this year, the firm doubled its Madrid presence after securing a tie-up with three-partner insurance boutique Asjusa.
Tougher governance and a more commercial outlook under managing partner David Pollitt and senior partner Virginia Clegg means the future looks bright for this City institution.
Back in 2014, not many – if any – would have predicted Addleshaw Goddard would boast one of the highest percentage growth rates in profit per equity partner (PEP) across the Legal Business 100 over the next five years. But with PEP increasing 13% to £730,000 in the 2018/19 financial year, it has risen an impressive 87% over that time.
The firm has enjoyed a particularly strong run of form over the last five years and 2019 was another exceptional year, with revenue up 8% to £38.5m – double what it was six years ago. The increase in top line hasn’t occurred at the expense of profitability – the firm ranks 14th in the LB100 across key metrics.
Described by Legal Business as ‘an evolutionary force in a raw Darwinian sense’, the world’s highest-grossing law firm and one of the fastest-growing firms continues to polarise opinion, not only because it struck out on its own but also because its success has further exposed the soft underbelly of many top-tier firms in New York and London.
One of UK law’s success stories of the past five years is undoubtedly Osborne Clarke, which has increased its top line 89% since 2013/14 to £268.5m, the second-best five-year performance in the UK top 100 – off the back of its international expansion. Although its PEP growth stalled in 2018/19, it has risen 37% since 2014 to £703,000.
This City outlier marked a tenth consecutive year of revenue growth in 2018/19 with an 11% increase in turnover. Revenue at the firm grew to £162.5m for the 2018/19 financial year – good for growth of just under 70% over the past five years – while PEP hit £1.25m. Since 2009, Travers has grown from being a £64.5m business.
DAC Beachcroft (DACB) has notched its sixth consecutive year of turnover and profit growth, the firm’s latest financial results show, while also announcing that managing partner David Pollitt has secured a second term at the helm following an uncontested leadership election.
Revenue at the firm grew 6% to £258m, up from £243m last year, while profit before tax increased 7% to £56m. Profit per equity partner also grew, up a modest 3% to £590,000. Meanwhile, the firm improved its net cash position to £8m, having put in place ‘significant liquidity retention measures in response to the Covid-19 crisis’.
For Pollitt (pictured), the results will be the icing on the cake following his unchallenged leadership election, which will see his second term officially begin 1 November and last five years. Commented Pollitt: ‘Our results reflect, at the group level, yet another year of consistent improvement. I am very pleased we were able to end the year strongly, particularly given the impacts of Covid-19 which started to take hold in the final quarter.
We have taken steps to grow and nurture our business with a view to future-proofing it and making it as resilient as possible – for the benefit of our clients, our colleagues, and our communities.’
Since being first elected in November 2015, Pollitt has overseen an expansive period for the firm. In 2019, DACB lured a five-partner City insurance team from Norton Rose Fulbright while also launching in Paris. Meanwhile, in January of this year, the firm doubled its Madrid presence after securing a tie-up with three-partner insurance boutique Asjusa .
Despite the gnaw of economic uncertainty caused by Covid-19, Pollitt remains committed to international expansion and investment, heralding the firm as ‘financially and operationally resilient as possible, and we anticipate that these efforts will hold us in good stead in the current, straitened times.’
thomas.alan@legalbusiness.co.uk
For more on DAC Beachcroft’s turnaround, read last year’s management interview with David Pollitt and Virginia Clegg – ‘The DAC Interview – Close to the rocks’
Controversial plans for building a third runway at Heathrow Airport run the risk of being abandoned after campaigners led by Leigh Day proved victorious in the Court of Appeal today (27 February).
The case involved five separate claims against the Secretary of State for Transport, who had been pursuing the policy of creating an invidious third runway at Heathrow Airport. However, the policy was deemed unlawful following a successful appeal which rested on novel arguments around the runway’s potential impact on climate change.
‘The main sensitivity of the case was the Paris Agreement,’ Leigh Day partner Rowan Smith, who successfully represented environmental campaign group Friends of the Earth, told Legal Business. ‘We argued successfully that the international agreements made under the Paris Agreement had to be considered regarding the runway. The court emphatically overturned the previous decision.’
In the High Court, challenges to the multibillion-pound scheme were rejected as it was deemed the then transport secretary Chris Grayling had sufficiently considered the environmental concerns in the policy.
However, residents, local councils, environmental groups and London Mayor Sadiq Khan all brought judicial reviews of the government’s decision on the scheme. Moreover, the arguments around the government’s commitments under the Paris Agreement – which unites multiple nations in a commitment to combat climate change – proved to be more persuasive than was initially expected by the unsuccessful parties.
‘In our case we think they were wrong on competition grounds,’ Heathrow Hub representative and DAC Beachcroft partner Christopher Stanwell told Legal Business. ‘That’s why we will be seeking permission to appeal it.’
Heathrow Airport is also among those seeking to appeal the decision at the Supreme Court, though the government has confirmed it would not be appealing – making any potential reversal of the decision more challenging.
The dispute brought together an array of legal advisers. Heathrow Airport was represented by Bryan Cave Leighton Paisner partner Tim Smith while Arora Holdings was represented by CMS Cameron McKenna Nabarro Olswang partners Ashley Damiral and Caroline Hobson. DAC Beachcroft’s Stanwell instructed Brick Court Chambers’ Robert O’Donoghue QC and Emma Mockford as well as No5 Chambers’ Martin Kingston QC.
Meanwhile, The Mayor of London’s in-house team instructed Blackstone chambers’ Ben Jaffey QC and Flora Robertson among others, while Leigh Day instructed Matrix chambers’ David Wolfe QC and Landmark Chambers’ Andrew Parkinson for Friends of the Earth.
DAC Beachcroft is looking for further opportunities in Europe and South America after doubling the size of its Madrid office by combining with a three-partner insurance boutique.
The firm today (21 January) took on 20-lawyer outfit Asjusa, which focuses on professional liability and insurance in the healthcare sector, led by partners Eduardo Asensi Pallarés and Iñigo Cid-Luna Clares. The third partner joining is Julio Albi.
The move effectively doubles the size of DAC’s Madrid outpost, with the two firms having known each other for a while. DAC managing partner David Pollitt (pictured) told Legal Business the combination made sense given clients’ increasing desire to buy more services from fewer firms.
‘A lot of Asjusa clients are existing clients of our Spanish office and to integrate their health insurance business into an existing international office hit a lot of sweet spots for us,’ he said. ‘We will once again become the largest insurance practice in Spain.’
The move follows a period of expansion at DAC, which launched in Paris and Belfast in the last year, as well as expanding its Dublin and Glasgow offices. The firm also brought in a seven-strong team from Norton Rose Fulbright in London. It now has a presence in the UK, Paris, Dublin and Madrid as well as a German partner, Bach Langheid Dallmayr, as part of its international alliance Legalign. It also has offices in Mexico, Chile and Colombia as well as associations elsewhere in South America.
‘Europe’s pretty well covered but of course we have other jurisdictions that insurance clients are interested in,’ added Pollitt. ‘I also wouldn’t rule out us wanting to open our own offices in other countries in Latin America. We’re very much trying to take proximate steps, rather than trying to have an ambition to do absolutely everything all at once.’
DAC has turned things around after clearing nearly £40m of debt in the last four years. Revenue at the firm grew 6% to £243m in the year to 30 April 2019, building on an 11% uptick the previous year, and coupled with a 10% increase in profit to £52m. Profit per equity partner (PEP) similarly increased 7% to about £570,000.
Hamish.mcnicol@legalbusiness.co.uk
For more on DAC Beachcroft’s turnaround, read ‘The DAC Interview – Close to the rocks’
In an otherwise sedate week for City legal recruitment, DAC Beachcroft has proved the exception to the rule for August hiring, adding a seven-strong insurance team from Norton Rose Fulbright (NRF) in London.
The team joining DAC was led by insurance litigation partner Kirsty Hick who joined on 1 August and acts for global and London market insurers. She has experience advising on complex coverage and defense issues as well as warranty and indemnity claims. The firm has been trying to grow its high-end international insurance business for the last few years with the London hires being a significant boon to that strategy.
The move follows the hire in May of Liam O’Connell, who was previously head of NRF’s EMEA insurance claims team.
Legal Business: ‘It’s a reflection of how far we have come as a firm, that we can attract the quality of Kirsty and Liam from a firm like Norton Rose to our firm. We can provide them with a very strong platform from which they can further develop their practice.’
‘There’s only three law firms that can genuinely say they offer a full-service to insurance clients and that’s ourselves, Clyde & Co and Kennedys. The market is consolidated around those three firms and as a result some of the other firms are beginning to lose some of their insurance practices’, Pollitt added.
Legal directors Rebecca Bailey and Sarah O’Connell and senior associates Jack Holling, Natasha Marshall and Cathryn Teverson will join Hick at the firm in September.
Elsewhere, Taylor Wessing has hired Alison Dennis from Fieldfisher to co-head its life sciences and healthcare group.
Dennis is experienced in life sciences regulatory and transactional work, and acts for medical device, pharmaceutical and biotech companies. The hire of Dennis is intended to fill the whole left by the firm’s previous head of life sciences, Malcolm Bates, who will be leaving the firm for Goodwin Procter. Both Dennis and Bates are currently carrying out their notice periods.
Meanwhile, newly formed London firm Avonhurst has added two ex-magic circle lawyers to its team. Ian Frost joins from Vinson & Elkins but spent over 20 years at Freshfields Bruckhaus Deringer working on leveraged finance transactions. James Wyatt joins from Linklaters where he was a senior lawyer in global project finance matters, energy and infrastructure sector finance and infrastructure acquisition finance. The firm was formed last month by Jonathan Bloom, previously a capital markets and funds partner at Jones Day. The firm is focused on offering services around legal, legislative and political risk alongside capital markets advice.
Eversheds Sutherland meanwhile hired partners Werner Brickwedde and Simon Weppner in Dusseldorf. Brickwedde joins the corporate team from Clifford Chance and has experience in cross-border transactions while Weppner joins the tax team from Taylor Wessing. He is focused on the tax structure of company acquisitions and investments.
Alexander Niethammer, head of the commercial practice group commented: ‘We can strengthen our position in providing cross-border transaction and tax advice from one of the most important German locations for foreign direct investments.’
Finally, TLT has expanded its real estate capabilities with the hire of Claire Hamilton from JMW in Manchester. Hamilton has experience in property investment, development and finance and also in-house experience from time spent at MCR Property Group.
DAC Beachcroft (DACB) has cleared nearly £40m of debt in about four years, providing the icing on a financial cake which has sweetened for a fifth successive year.
Revenue at the firm grew 6% to £243m in the year to 30 April 2019, building on an 11% uptick the previous year, and coupled with a 10% increase in profit to £52m. Profit per equity partner (PEP) similarly increased 7% to about £570,000.
DACB managing partner David Pollitt (pictured) told Legal Business the result was ahead of budget following three strong years previously: ‘For us, revenue growth isn’t the key indicator. What’s key for us, in a market that people are beginning to find a bit more difficult, is that we’ve improved our profit by 10% and we’ve improved our profitability.’
He added: ‘The icing on the cake is that we turned our net debt position into a net cash position, having started last year with £14m net debt and ending up with £1.5m in cash. That swing is the final piece of the jigsaw in our financial resilience, we’re in control of our business.’
Pollitt, who was appointed as the firm’s leader alongside senior partner Virginia Clegg four years ago, said the firm had improved its cash position by being disciplined in collecting money and controlling costs, having previously ‘drifted close to the rocks’.
The firm had still managed to invest, however. It opened new offices in London, Paris and Belfast, and made lateral hires Pollitt admits the firm would unlikely have made a few years ago: for example, former Norton Rose Fulbright head of insurance Liam O’Connell and Chris Wall, who joined as head of banking from Kirkland & Ellis.
Pollitt said it was continuing to invest and was hoping to announce some big team hires in the next few weeks, as well as having further laterals in the pipeline.
Insurance – which accounts for about 60% of the business – had a strong year, with the firm acting for all of the UK’s top ten insurers, while real estate went backwards in revenue terms.
Looking ahead, Pollitt cautioned the market was ‘not as easy as it was a couple of years ago’. The firm was growing and on-budget so far this year but he believed firms which wanted to grow substantially would do so inorganically.
‘Clients, understandably, are saying, “Why should I do that now? Why should I undertake this brand new IT project now? Why should I refinance?” Off the back of all those decisions hangs a lot of legal work, so everyone’s getting thoroughly bored. It seems like we’re in a holding pattern at the moment, I don’t think there will be many firms knocking it out of the park.’
